A DIGITAL currency could replace cash under plans pushed by Chancellor Rishi Sunak.
The “digital pound” would be controlled by the Bank of England in the same way as sterling.
The Chancellor earlier this year set up a taskforce to look into launching the digital currency – dubbed ‘Britcoin’ by drawing inspiration from the cryptocurrency Bitcoin.
Consumers could hold the currency in accounts linked to the Bank of England but it is undecided if interest rates would be attached to it.
Retailers and other companies could also accept the digital currency instead of debit or credit cards.
People are likely to be limited on the sum of Britcoin they can hold initially but sterling would be able to be changed into Britcoin easily and quickly.
Supporters say the currency would allow the Bank to give an economic boost in a financial crisis by paying ‘Britcoins’ into people’s bank accounts.
It could also be quicker and cheaper to make online payments and transfer money while slashing banking costs for small firms.
But critics fear it would lead to financial instability, making it harder for the Bank to regulate the economy with policies such as interest rates.
And they worry it would lead to higher loan and mortgage rates, the Mail reports.
The Bank of England is also thought to be less in favour than the Treasury because of huge numbers piling into cryptocurrencies, with some investors losing vast sums.
Their joint taskforce is expected to report to Mr Sunak by the end of the year.
Unlike cryptocurrencies, Britcoin will be backed to the central bank and linked to the pound, theoretically stopping the value from swinging wildly.
China has already been testing a digital yuan and US Treasury secretary Janet Yellen has hinted at a digital dollar.
The European Central Bank is also looking into a digital euro.
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